Vineyard of the Saker...
Moon of Alabama.....
FRIDAY, AUGUST 8, 2014
German Handelsblatt Releases Stunning Anti-West Op-Ed, Asks If "West Rabble-Rousers Are On The Payroll Of The KGB"Submitted by Tyler Durden on 08/08/2014 - 12:57
Up until this point Angela Merkel, and German media in general, had been staunchly on the side of the west when it comes to dealing with Russia, Putin and realpolitik in broader terms. That changed dramatically today when Gabor Steingart, the chief editor of Handelsblatt, Germany's leading economic newspaper, came out with a stunning op-ed, in German, English and Russian, titled simply that "The West on the wrong path" in which the editor comes out very vocally against the autopilot mode German media has been on for the past several months and calls for an end to a strategy of sanctions and Russian confrontation that ultimately "harms German interests" and is a dead end.
Futures Soar Back To Green, Dax Over 9000 On RIA Headline "Russia Seeking TO De-escalate Conflict"
Submitted by Tyler Durden on 08/08/2014 07:23 -0400
Wonder why moments ago futures soared and wiped out all overnight losses of nearly 15 points, pushing into the green, the DAX surging back over 9000 and the USDJPY right back to its cozy tractor-beam manipulated level of 102.000, just as the NY Fed's Kevin Henry walked through the door? The culprit: the following lone headline blasted by Bloomberg moments ago:
- RUSSIA SEEKING TO DE-ESCALATE UKRAINE CONFLICT: RIA
Supposedly RIA is citing the secretary of the Russian Security Council, and while we have yet to find any more context on this sole headline, it was enough for the algos to assume that, just like yesterday when a same story was floated only to be roundly rejected in hours, all is again fixed. Needless to say, believing that Putin will back off at this point is a pipe dream only a momentum-igniting vacuum tube can harbor.
Of course, by the time Russia rejects any hopes of de-escalation, the catalyst for the ramp will be forgotten and stocks will close green ahead of the weekend, just as the Princeton central-planners demanded. And making sure Russia has zero intentions of de-escalating, is the latest counter-escalation by Ukraine itself:
- KIEV GOVERNMENT ALSO ASKING NATIONAL DEFENCE AND SECURITY COUNCIL TO TAKE SANCTIONS AGAINST 65 RUSSIAN COMPANIES "WHICH ALSO FINANCE TERRORISM"-YATSENIUK
One can just see Putin "backing off" after being verbally and sanctionally slapped by Ukraine...
Moon of Alabama.....
Ukraine: One Nazi Resigns - Russia Sanctions Start To Blow Back
The most aggressive man in the Ukrainian government, the Secretary of the National Security and Defense Council Andrey Parubiy resigned today:
The media stated that Parubiy decided to resign after he was ordered [by President Petro Poroshenko] to declare another ceasefire in Kiev’s military operation in the southeast of the country, but he refused to do so.
Parubiy was co-founder of the far-right Social-National Party of Ukraine and was creator and commander of the Einsatzgrupppen like volunteer National Guard forces which are currently suppressing the people in the east.
It seems that the indiscriminate shelling of major cities in the east under Parubiy's command had finally had enough negative publicity effects. The UN is alarmed about the refugee streams and the humanitarian situation and even Amnesty International is now accusing Parubiy's Einsatzgruppen of abductions and ill-treatment of the eastern population. Poroshenko needs to stop the war before public support for him completely disappears.
An attempt today by the new rulers to clear away the Maidan protesters who helped them into power ended, like before, in outright street fights. These protesters are still waiting for any change. Corruption in Ukraine is as big as ever. Only the oligarchs who end up with the peoples money have changed.
NATO chief Rasmussen, who is currently in Kiev, will be disappointed if Kiev decides to stop the war. He is dearly hoping for Russia to militarily intervene in Ukraine which would then justify further NATO aggressions. If Kiev keeps shelling the local population Russia will need to send peacekeepers to stop the killing. If the shelling stops there is no reason for Russia to step in.
The outright stupid sanctions the EU put on Russia are creating the well deserved blowback. The Russian president Putin's approval rating soared to 87%. The counter sanctions Russia is implementing by rejecting food imports from the countries sanctioning it will be great for Russia's local producers. Some "western experts" believe that sanctions will over time push the Russian middle class against Putin. Anyone with a slight insight into Russia's social history will call this bullshit.
Under pressure Russia always unites and the national character is one that will rather do without any luxury at all before giving in to foreign pressure. Russia has enough land, people and resources to produce everything it needs. There is no way sanctions on Russia will have any of the allegedly desired effects.
U.S. Sanctions Erode Its Foreign Influence
A few days ago the Leveretts looked at the effects of U.S. financial sanctions and the other ways the U.S. pisses off major countries. They find that the current path of U.S. foreign policy will erode the U.S. dollar hegemony and lead to a destruction of the "extraordinary privilege" (de Gaulle) the U.S. has had with the ability to print the world's reserve currency. The political erosion of the dollar will be felt in the commodity markets and especially in energy deals which will then have further effects in foreign relations: Petrodollars, Petroyuan, and the Ongoing Erosion of American Hegemony
Looking ahead, use of renminbi to settle international hydrocarbon sales will surely increase, accelerating the decline of American influence in key energy-producing regions. It will also make it marginally harder for Washington to finance what China and other rising powers consider overly interventionist foreign policies—a prospect America’s political class has hardly begun to ponder.
Sadly, only few will listen to the Leveretts but now Bloomberg picked up the theme:Russia Sanctions Accelerate Risk to Dollar Dominance
While no one’s suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing. The greenback’s share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001. The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.“The crisis created a rethink of the dollar-denominated world that we live in,” said Joseph Quinlan, chief market strategist at Bank of America Corp.’s U.S. Trust, which oversees about $380 billion. “This nasty turn between Russia and the West related to sanctions, that can be an accelerator toward a more multicurrency world.”
Some five years ago we already looked at this decline of the U.S. dollar as reserve currency and its effects:
So far the U.S. could borrow cheaply and pay back less in real value than the original loan. That privilege is now going away. The trillions the U.S. currently needs to borrow from abroad will have to be payed back in full. That is a major change in its global power status and will seriously decrease its influence in international policy questions.
The European Union which stupidly followed the U.S. sanctions on Russia with its own is also hurting itself:
Financial interdependence offers a powerful opportunity for coercive diplomacy.But the unintended message Europe's leaders sent is that financial interdependence is a source of vulnerability that countries like Russia, but also China, Iran and others, would be wise to avoid.
Europe's financial sanctions against Russia likewise add incentives for countries to look for alternative arrangements that reduce financial interdependence.
Moreover, those incentives will only increase if the sanctions are successful. Even if Europe encourages the Russian government to change its policy toward Ukraine, the Russian government will respond over the longer term by seeking financial arrangements that leave it less exposed to such coercion.
It will take years until the dollar will lose its reserve status but the decline is already visible. More and more deals are now made bilateral between partners in their own currencies and get settled outside of the financial channels the U.S. tries to sanction, block, spy on or to criminalize.
The U.S. foreign policy reliance on sanctions, pressure and war is sawing off the high branch the U.S. is sitting on.